How Capitalism Will Keep a Nation Hungry
Posted by
Kevin
It seems that the best way to feed starving nation is to ignore the free market fundamentalists at the World Bank:
But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.
In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.
Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.
Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.
The notion that the free market can solve every problem in the world is idiotic on its face. There has never been and I suspect that there never will be any one tool that is appropriate for every job you might face. It was clear that the soil in Malawi need replenishment, and it was also clear from watching Western countries that technical farming and the use o fertilizers can make an enormous beneficial impact on farm output. It was also clear that a country as poor as Malawi was going to need someone to step in and subsidize at least the first round of funding that would be required to provide poor farmers with fertilizer. It was a role perfectly suited for the government.
The World Bank knew all of this, and yet they still insisted that a hungry country stop growing food and start growing cash crops for export so that it could one day buy food from other countries. It was an insane idea on its face, and yet, because it adhered to the notion of capitalism uber alles, the Word Bank insisted on it. Their free market lead to starvation and privation. The government intervention lead to record crops, and end to famine, and even the growth of the economy driven by an increase in employee wages:
“The government has taken the bull by the horns and done what farmers wanted,” he said. Some economists have questioned whether Malawi’s 2007 bumper harvest should be credited to good rains or subsidies, but an independent evaluation, financed by the United States and Britain, found that the subsidy program accounted for a large share of this year’s increase in corn production.
The harvest also helped the poor by lowering food prices and increasing wages for farm workers. Researchers at Imperial College London and Michigan State University concluded in their preliminary report that a well-run subsidy program in a sensibly managed economy “has the potential to drive growth forward out of the poverty trap in which many Malawians and the Malawian economy are currently caught.”
In a very real sense, the Word Bank’s insistence on a free market and an end to government intervention helped prolong starvation. Governments and free markets are human created tools, nothing more, nothing less. What matters is not which tool is used but rather which tool produces the desired outcome. You forget that and you get the World Bank, an organization religiously wedded to only one tool and insistence on the uses of the one tool in the face of all contrary evidence. You forget that and you get famines and near-famines that last longer than they should and kill people who should have lived.
